A 1.5 per cent increase in property prices last month put paid to any hopes of a further reduction in interest rates yesterday.

As analysts warned first time buyers about the levels of mortgage debt, the monetary policy committee voted to keep rates unchanged at four per cent.

It is now predicted that a slump in property prices could occur unless prices begin to slow considerably.

John Monks of the TUC said the decision would do little to aid manufacturing and hit out at the bank's "excessive and persistent caution".

Research by the Halifax revealed the average age of a first time buyer has risen to 34 as many young people are now having to wait longer before they get on the property ladder.